Weighing the Options With Credit Card Debt – NYTimes.com
“A debt management plan doesn’t reduce the balance” owed, says Rick Phillips of Consumer Credit Counseling Service of Greater Atlanta, “but one of the big advantages is that the interest rates go down, usually significantly.”
By TARA SIEGEL BERNARD
Published: May 15, 2009Many consumers are buckling under the weight of mounting credit card debt.
So it should come as no surprise that some have been lured in by often-hollow promises from debt settlement companies, claiming they can reduce debts to a small fraction of what is owed by negotiating with creditors.
But as their customers have learned, debt settlement companies are not debt genies — they do not have special powers to make your debt disappear. Andrew M. Cuomo, New York State’s attorney general, recently announced an investigation into more than a dozen debt settlement companies. Many companies require hefty upfront fees — often 15 percent of your total debt — but often don’t deliver on their promises, experts say.
Of course, figuring out a reasonable way to shed debt may seem an insurmountable task, especially if you have lost your job or you are simply not earning enough. The numbers are not pretty: if you carry $10,000 on a credit card with an 18 percent rate and make only the minimum payment (say, 1 percent of the balance plus interest), it will take 32 years to pay it off — for a grand total of $24,834. That does not count late fees or over-the-limit charges.
So it is important to assess your options before you fall too far behind. This is probably best accomplished with a reputable credit counselor. But before you pick up the phone, familiarize yourself with the pros and cons of the various options.
read article here… Weighing the Options With Credit Card Debt – NYTimes.com.
Other info covered in the article…
- DO IT YOURSELF
- FIND A COUNSELOR
- DEBT MANAGEMENT PLAN
- DEBT SETTLEMENT
- BANKRUPTCY
